Carer's Allowance Cliff-Edge to Be Scrapped in Budget
The rule that has left unpaid carers facing penalties of thousands of pounds is to be abolished, according to the Guardian. Chancellor John Healey will announce a taper for carer's allowance in Wednesday's budget, ending the so-called cliff-edge.
At present, a carer who earns even a penny more than the weekly limit of £204 loses the whole week's payment of £86.45. Someone who went 1p over the limit every week for a year would breach it by 52p, yet be asked to repay £4,495.40.
Under the new system, only £1 of allowance will be taken away for each extra £1 earned above the limit. Carers will no longer be worse off for working more hours or accepting a pay rise.
Debts that built up unnoticed
The Department for Work and Pensions knew when carers went over the limit but did not warn them, insisting the responsibility to report changes lay with carers. Many spent long periods unaware of a breach, sometimes for years. Overpayment debts were typically £2,000 to £5,000, and in some cases reached £20,000. Some carers were convicted of fraud.
An independent review of overpayments, led by disability rights expert Liz Sayce and published last year, found that about 180,000 carers ran up debts totalling £300m between 2019 and 2025. It also described one carer who was put 15p a week over the limit when the minimum wage rose faster than the earnings limit, and who was later told she owed a £2,000 penalty on above-limit earnings of just £5.
Campaigners welcomed the change but were disappointed that building the new digital system means it will not arrive before the end of the decade.
Reaction
Healey told the Guardian that "doing an extra shift or getting a small pay rise can actually leave someone worse off. That cannot be right."
Kirsty McHugh, chief executive of Carers Trust, called it "an important and long-overdue reform" and urged wider change to a benefit "stuck in the 1970s". Emily Holzhausen, policy director at Carers UK, said carers had shared "deep fears of going just a few pence over the earnings limit and losing all of their benefit".
The change is one of five "everyday fixes" announced before the Budget. Others include making higher tax-free mileage rates permanent, which the Treasury says will benefit about 3 million people, and extending parental support worth up to £194 a week to an extra 150,000 new parents, including self-employed fathers. Import tariffs are being removed on more than 100 products and the number of Post Office drop boxes will rise to 1,000.
Source: The Guardian